Bureaucracy Relief Ordinance: Amendment to the provisions on reporting obligations in capital and payment transactions under the Foreign Trade and Payments Ordinance (AWV)

Companies should monitor changes and prepare for implementation, as the amendments will come into effect on January 1, 2025. 

The corresponding proposed amendment to the reporting obligations in capital and payment transactions was published in the Federal Law Gazette on December 13, 2024 (Federal Law Gazette 2024 I No. 411).

For download: Overview of reporting obligations in capital and payment transactions under the Foreign Trade and Payments Ordinance

Reporting thresholds are raised

There is no obligation to report assets of German residents abroad or assets of non-residents in Germany (formerly K3 or K4 reports) if the balance sheet total of the foreign company or domestic company is less than EUR 6 million (previously EUR 3 million).

Foreign receivables and liabilities (formerly Z5 and Z5a reports) must be reported if total receivables or liabilities amount to more than EUR 6 million (previously EUR 5 million) at the end of the month. 

Foreign payments (formerly Z4 reports) must be reported if these exceed a value of EUR 50,000 (previously EUR 12,500). 

The assumption of an association of foreign nationals in the event of certain family relationships no longer applies. Due to such an alleged economic network, the reporting thresholds for the former K4 reports could also be reached, for example, by married persons or persons already related by marriage.

The Ordinance contains conceptual clarifications regarding the emergence of a reporting obligation for “institutional units”. The clarifications concern, among other things, notional resident units, holding companies, groups of companies and special purpose entities.

Adjusted deadline

A distinction between receivables and liabilities from financial relationships with foreign banks and foreign non-banks (formerly Z5 and Z5a reports) is no longer required. The reports of foreign receivables and liabilities must now be submitted on a consolidated basis by the tenth working day of the following month. In future, the deadline for payment reports will also be based on working days.

New exception
Interest payments for foreign bonds and money market instruments no longer have to be reported under the former Z4 form.

New type of payment
It has now been legally established that the transfer of crypto assets is considered a payment. New performance indicators have also been introduced in this context.
Payment obligations in connection with transit trade are now recorded under the former Z4 form. Procedural simplifications for payments by shipping companies have been abolished.

Renaming
The registration forms are now simply numbered consecutively:

• K3 report = Annex 2
• K4 report = Annex 3
• Z5 report / Z5a report = Annex 4
• Z5b reports = Annex 4
• Z4 report / Z8 report = Annex 5

The changes may facilitate the automated processing of reporting obligations. It remains to be seen whether and how the comparatively small increase in the exemption thresholds can represent an advantage for companies. One positive aspect is that the deadline for notifications in accordance with Annexes 4 and 5 are now also based on working days, and no longer on calendar days.

The changes will come into force on January 01, 2025.

We recommend that all companies review their internal business transactions and reporting processes and adapt them to the new systems, deadlines and value limits. We will be happy to support you in this process.

This article was updated on December 23, 2024 as a result of the Federal Ministry of Justice’s decree on the Bureaucracy Relief Ordinance.